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Only 2.2% of Nigerians will benefit from new minimum wage – NBS report

Published

6 months ago

June 13, 2024

Only 2.2% of Nigerians will benefit from new minimum wage – NBS report

About 2.2 per cent of the Nigerian population currently put at 229 million will benefit from a new minimum wage being negotiated, a report by the National Bureau of Statistics has shown.
Specifically, the new NBS report stated that 5.3 million of a total of 76 million workers (33.2 per cent of the total population) would benefit from the wage increase.

A back-of envelope calculation by the National Bureau of Statistics (NBS) shows that 1.2 million (23 per cent) and 0.3 million (six per cent) work with the federal government, drawing salaries from the Consolidated Revenue Fund, and government-owned enterprises respectively.

Also, another 1.3 million (25 per cent) and 0.7 million (13 per cent) work with the state governments, their agencies and local government areas. The remaining 1.8 million (34 per cent) work in formal private organisations.

While experts believe that civil and public servants deserve more in terms of their take home packages, they, nonetheless, observed that for the federal and subnational governments to address the wage crisis in the country, they have to do more in reducing the cost of living and provide enabling environment for businesses to thrive, which will in turn improve the livelihoods of millions of citizens that are wallowing in poverty.

And unlike in advanced societies, whatever civil servants earn in Nigeria will directly or indirectly be shared with the 66.8 per cent remaining population.

In developed societies, there are strong and sustainable safety nets for the people who are not working or have lost their jobs in order for them to have a decent life.

Also, the state takes care of people who have retired as they are seen as assets in society and not as liability to their families.

While there are agencies responsible for similar interventions here in Nigeria and other developing economies, they are far from the ideal.

Experts believe that many civil and public servants in Nigeria borrow or use other legal and dubious means to augment what they get as salary in order to meet up with the demand for the basic necessities of life such as food, shelter, health, education and transportation for their immediate and extended families.

The federal minimum wage, currently at N30,000, was last raised in 2019, when the inflation rate was between 11 and 12 per cent.

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However, the purchasing power of the naira has since been eroded by 276 per cent (compared to what it was in 2019), hence the clamour for an enhanced salary structure.

Nigeria among worse salary payers in Africa

Findings revealed that Nigeria is ranked 44th in Africa in terms of paying the lowest minimum wage, according to Professor Kemi Okuwa of the Nigerian Institute of Social and Economic Research (NISER). Analysis revealed that out of the 76 million workers in the country, only 5.3 million (6.9 per cent) work in the formal sector and are collecting wages.

The findings showed that this is the group that is likely to benefit most from a new minimum wage that has remained contentious and a source of discord between the federal, state and local governments on the one hand and the organised labour on the other hand.

Currently, there is a stalemate in the polity as the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) have rejected the N62,000 minimum wage offered by the federal government, even as the Nigeria Governors Forum (NGF) and the Association of Local Governments of Nigeria (ALGON) said they could not afford to pay the figure.

Ironically, the organised labour said anything below N250, 000 would not serve as a living wage which Nigerian workers were aspiring to have.

Many pundits, including some members of the National Assembly, are suggesting that something in the range of N100,000 as minimum wage will uplift the lives of the working class without inducing additional inflation that will hurt the economy further.

Government and private sector workers

In his recent analysis, the Managing Director and Chief Economist of Analysts Data Services and Resources (ADSR), Dr Afolabi Olowookere, said regardless of how the recommendation in the new template for salaries might differ from what labour was currently asking for, both parties would find a common ground and in the final outcome there would be more money for labour.

He, however, said that when the labour finally “wins” the minimum wage battle, another thing that would remain obvious was in dissecting the discrepancy between current low-wage and high-wage workers; wage increase and productivity increase; and then cost of living and standard of living.

Olowookere said, “The implication is that the government will be the major institution that will pay the minimum wage. The private sector is largely informal.

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“The question now is, when they benefit, others will also want to benefit from them, either because they are dependent on them or they are selling things to them.

“The major message is that even when we increase the salary for these few people, we should not lose sight of other people that are dependent on them, and the people that are unemployed; they are many and we don’t have unemployment benefits in Nigeria.

“What also happens to those in the informal sector, even though they are working, they are not earning the minimum wage. The only benefit they can derive is to increase prices of goods and services to the extent that they can squeeze out from those who have benefited.”

Dilemma of workers in states

Dr Olowookere also said that attention should be paid to states, especially given that some of them were not yet paying the N30,000 agreed during the last upward review, which he noted had expired.

He said, “The analysis of the states’ budget performance shows that most of them are using 100 per cent of IGR to pay salaries.

“If there is no Federal Account Allocation Committee (FAAC), they can’t pay salaries. So, if you increase wages, what will be the implication on their performance? How would states with low revenue cope?”

Findings revealed that 15 state governments are yet to implement the old wage of N30,000. They are Abia, Bayelsa, Delta, Enugu, Nasarawa, Adamawa, Gombe, Niger, Borno, Sokoto, Anambra, Imo, Benue, Taraba and Zamfara.

‘Reducing cost of living is the way out’

Speaking on the way forward, Dr Olowookere canvasses a sustainable solution of raising productivity and reducing cost of living for everyone.

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He said when the government continued to increase salaries without corresponding increase in productivity, the cost of living would also keep eroding whatever gain was recorded by the workers and Nigerians in general.

He said, “No doubt, Nigerian workers are due for minimum wage increase. At the current high inflation rate and low productivity level, with everyone being ‘forced’ to provide their own infrastructure, it is a matter of time before all gains are lost.”

FG, states, LGs must not politicise wages – Peterside

In a recent intervention, public policy analyst and former Director General (DG) of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dakuku Peterside, said the implications of creating new salary structures and increasing the minimum wage were complex and multifaceted, requiring the careful consideration of various factors, including economic conditions, industry dynamics and social equity goals.

He said, “Our recent experience has shown that a salary increase may start a merry-go-round of cyclical inflation, which then eats up the value, and then we are back to where we started.

“In an economy with over 40 per cent food inflation, all stakeholders must apply caution and careful measures in implementing a new salary structure.

“However, governments (federal, state and local) cannot afford to play politics with the issue of ‘living wage.’”

Daily Trust

News

Yahaya Bello reports to EFCC office with lawyers

Published

15 hours ago

November 26, 2024

Trends Admin

Yahaya Bello reports to EFCC office with lawyers

A former Governor of Kogi State, Yahaya Bello, on Tuesday visited the Economic and Financial Crimes Commission (EFCC) to honour another invitation extended to him over alleged misappropriation of funds.

Bello went to the anti-graft office with his lawyers in the morning.

The ex-Kogi governor reportedly drove himself to the EFCC’s office in a black Toyota Hilux van with some lawyers.

He was said to have been taken by some operatives of the agency and are currently being grilled.

This is coming after the Supreme Court judgment which dismissed a suit brought by some state governments challenging the constitutionality of the agency.

The EFCC at the last hearing on November 14, sought the adjournment till November 27 in the fresh case it instituted against Bello.

It stated that the 30-day window was still running for the summons earlier issued.

News

Just in: Ebonyi governor suspends two commissioners, Perm Sec for misconduct

Published

15 hours ago

November 26, 2024

Trends Admin

Just in: Ebonyi governor suspends two commissioners, Perm Sec for misconduct

Ebonyi State Governor Francis Nwifuru has announced the immediate suspension of two commissioners with a permanent secretary among others for gross misconduct.

Those suspended are the Commissioner for Housing and Urban Development Francis Ori, and the Commissioner for Health, Moses Ekuma, with the Permanent Secretary of the Ministry of Health.

The suspension followed an incident on Saturday night, when the governor reportedly visited the Ministry of Health’s premises and was said to have found six officials diverting government materials.

Others suspended for three months are the Executive Secretaries of the State Primary Healthcare Development Agency and the Ebonyi State Health Insurance Agency

The suspension order was announced by the state Commissioner for Information, Jude Okpor, who cited alleged misconduct and dereliction of duties as the reasons for the disciplinary actions.

Okpor made the disclosure on Tuesday during a press briefing on the outcomes of the State Executive Council meeting held on Monday at the New Government House in Abakaliki, the state capital.

“Following cases of gross misconduct and dereliction of duties by some government officials and matters related thereto, the Chairman of Council directed the indefinite suspension of the Honourable Commissioner for Housing and Urban Development and three months suspension of the Honourable Commissioner for Health, respectively

“In view of the development, the Special Assistant to the Governor on Primary Health was directed to take charge of the ministry in the absence of the suspended commissioner.

Governor Nwifuru directed the suspended government officials to hand over all government properties in their possession including vehicles to the Secretary to the State Government.

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Why we’re borrowing despite surplus revenues – FG

Published

21 hours ago

November 26, 2024

Trends Admin

Nigeria’s Minister of Finance, Mr Wale Edun

Why we’re borrowing despite surplus revenues – FG

The Federal Government has defended its decision to borrow to address budget deficits, despite surpassing revenue targets in 2024.

Finance Minister Wale Edun and Budget Minister Atiku Bagudu clarified this position during a session with the National Assembly’s Joint Committee on Finance, Budget, and National Planning. The meeting focused on the 2025–2027 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

Last week, the National Assembly approved President Bola Tinubu’s $2.2 billion loan request to fund the N9.7 trillion deficit in the 2024 budget partially.

During the session, key agency heads, including Nigerian National Petroleum Company Limited (NNPCL) CEO Mele Kyari, Customs Comptroller-General Bashir Adeniyi, and Federal Inland Revenue Service (FIRS) Chairman Zacch Adedeji, presented their revenue reports.

The agencies reported exceeding their 2024 targets.

Customs Service: Generated ₦5.352 trillion by September 30, surpassing its ₦5.09 trillion target for the year. For 2025, the agency projects ₦6.3 trillion, with a 10% increase planned for 2026.
NNPCL: Achieved ₦13.1 trillion in revenue, exceeding the ₦12.3 trillion projection for 2024. Kyari announced a ₦23.7 trillion revenue target for 2025.

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FIRS: Surpassed multiple tax collection goals, including ₦5.7 trillion from company income tax against a ₦4 trillion target. Education tax collections also exceeded expectations, reaching ₦1.5 trillion compared to a ₦70 billion target.

Overall, ₦18.5 trillion of the ₦19.4 trillion 2024 revenue target had been achieved by September, indicating the goal will be exceeded by year-end.

Despite these surpluses, the government insists borrowing remains essential to cover budget gaps and support vulnerable populations.

Bagudu explained, “Even with agencies exceeding revenue targets, borrowing is necessary to address deficits and boost productivity, particularly for the poorest. This aligns with Agenda 2050, which aims for a GDP per capita of $33,000.”

Edun also reiterated that loans were critical for adequately funding the budget.

The committee, led by Senator Sani Musa, questioned the rationale behind the borrowing and demanded further transparency. The Immigration Service was specifically asked to provide documents regarding an “unacceptable PPP arrangement” before the end of the week.

The session underscored the government’s balancing act between increased revenues and fiscal challenges requiring external borrowing.